pleasw answer the question VOLKSWAGEN GEARS UP FOR GLOBAL COMPETITION and are cl
ID: 370571 • Letter: P
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pleasw answer the question
VOLKSWAGEN GEARS UP FOR GLOBAL COMPETITION and are clected in a manner similar pany has an excess ofa to the election of board directors in workers. The firm's e the United States. The supervisory ing in Cermany constitute Work cent of the worldwide work fo 242,000, but account for 58 of total wage costs. The su board has the exclusive power to appoint members of the manage- During most of the 1980s and into the 1990s, Volkswagen AG has pur- ment board, and it awards eac executive a contract for from 1 to5 board does not want to al sued a daring expansion strategy. or restruc- The company acquired two major years (renewable if the executive is type of major downsizin ng because of its negative im a j performing satisfactorily). The e strategy was supervisory board also participates on the work force. About ent lkswagen's automobiles are in in matters that can significantly affect employment. Hence its ap aimed at creating a “federated" European company: a true multina- tional emerging from the European made in the company's German plants. Attrition is expected to re. proval is necessary for foreign acqui sitions (such as those of Seat and e work force by 20,000, but it take several years. theater, gaining the capacities to rld Skoda) and plans to establish facto- A major problem for Volkswa- been building or r tion, there are separate divisions for each of the company's two s marques, or brands, Volkswagen andthan most other car manufacturers Audi, and separate divisions for both in the world. Finding ways to cut o existinggen is that it operates less efficicntly various parts of the world East Germany, China, and o. This expansion has enabled Seat and Skoda. Each division has costs is a major priority. One the company to serve national mar- ce the kets more effectively, as well as to number of platforms on which cars reduce labor costs. Although the been given a great deal of operating planned approach is to redu expansion has led to greater The rationale behind the struc- are built from a relatively high 16 ture is to allow the different brands down to 4. Similar-sized cars in the share, it has been extremely ex to customize their products to meet four divisions would share thou- mar requirements of their particular sand groups of customers. At the same time, each division is to emphasize ors. Current company chairman Volkswagen's traditional strengths amely, solid engineering and dri only four platforms "we will be able floor pans to windshield-wiper mo- The company faces increased com- Ferdinand Piëch explains that with to offer a much greater number of peti from Japanese cars that are froU.S. car manufacturers with ma ro research and development center is models than bcfore while keeping maintained in Germany for the use their designs highly distinctive QUESTIONS FOR CONCLUDING CASE 2 of all the divisions. Even with th talization used by Vol expected to cooperate and share when it is in the best interest of the that going to so few platforms could appear to use decentralization as a means of vertical coordination: rmi Audi, while adding higher costs to lower-priced brands. In "codetermination" applies, whereby One of Volkswagen's major cost company? What dilemmas does Volkswagen face with re both a board of management and a factors is its large and expensive supervisory board. The board of management usually has about six Wolfsburg, Germany, site of Volkswa- members, who are top executives in gen headquarters, contains the the company. This board is responsi- world's largest automotive plant ble for the day-to-day management under one roof. Partially because and operation of the company and labor costs are exceptionally high helps coordinate the activities of the ¡ Volkswagen has expended consider- four divisions when necessary. Irn contrast, the supervisory board work force in Germany. The town do ownsizing and restructuring? 3 Vhat mechanisms for promoting orizontal coordination and innova What could Volkswagen do to increase horizontal co and innovation tion can be identified? able effort to automate the plant. The move has enabled the company oversight. Half of its 12 toto focus workers on more complex tasks, such as customization. At the same time, Piëch estimates the com tatives, and half represent ownersExplanation / Answer
1:Volkswagen has both board of management and board for supervisory.The board of management has around 6-12 members and are responsible for all day to day activities and decision making .The board of supervisory is responsible for oversight or to supervise the activities and decision taken by management board.
As a pary of vertical co ordination they have separate management for all of their companies and they retained their brand name as such. thus they wanted to have a separate Outlook towards all of their different brands
2: The major dilemma was company has become more unstructured and motivation among employees came down this results in huge attrition of the company in their core workforce.Overall it creatrd negative impact on workforce.
3: Horizontal conordination is all about expanding their product category by merging or acquiring other major car manufacturers. Through acquisition of Skoda and Seat they have completly own the European region and expanded their business diversily. To become more innovative they can also start segment of cat based on life style, sport etc and can classfy their brand based on various name
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